It's amazing that more attention isn't paid to the rise of online fantasy sports. Today's marketing dollars aren't just shifting towards digital media, they're starting to flood social networking sites where user segmentation and data are practically spoon fed to marketers. But while video sites like Hulu and Youtube are reaping the benefits, there's still dozens of other networks that, for one reason or another, still aren't being tapped for their full potential. Case in point, fantasy sports.

Industry Overview

According to the Fantasy Sports Trade Association [FSTA], the industry generates around $1 Billion in annual revenue, on everything from branded content to subscription fees. And when you include the sports, media, and retail stakeholders that also benefit from fantasy participation, some estimate the industry's influence at around $4 Billion. Considering the steady rise in online participation, these stats don't seem too far fetched.Some semi-recent numbers suggest that over 27 million people in the US (11% of the population) have taken part in some kind of fantasy sports league - and there's no shortage of Millennial males in that number. In fact, my friends and I just drafted our teams for "Live Free or Slide," a 14-team fantasy baseball league on Yahoo! Sports. With team names like "Morning Millwood" and "Designated Twitters," you can assume the league is pretty casual (despite the $20 buy-in). But for advertisers trying to reach this male demographic, the payoffs of fantasty baseball could be absolutely phenomenal - when played correctly.

The Industry's Players

As the industry market leader, Yahoo seems to appreciate the potential of fantasy sports. Fast Company notes that online sports content is a "gold mine" because it's consumed largely by "the highly desirable demographic of men between the ages of 25 and 49." According to the article, it's the ad revenue that Yahoo is after; online sports content could generate as much as $1.1 billion by 2011.

Update: March, 2010

Since beginning this post in March 2009, it seems like more and more marketers are catching on. Of course, while Yahoo! Sports is still the 800 lb gorilla in the fantasy sports arena, sports fans will probably recognize some other examples:CBS Sports:The popular choice for NCAA college basketball stats and brackets Notably, they have a March Madness Facebook app that lets users to compare their bracket picks with other friends in the pool.

ESPN:The self-proclaimed "Worldwide Leader in Sports" no doubt has the revenue and media resources to take over the fantasy sports world from Yahoo. But because it came late to the party, it needs to do something that really sets it apart. Having never used the ESPN site, I can't comment either way. If you've used ESPN fantasy before, feel free to leave a comment below and let me know what you think.

NFL: If you're a football fan, you've probably seen the big push to drive site traffic - the tagline "If you want the NFL, goto the NFL." Once again, I have absolutely no idea what kind of advantages their setup might offer over Yahoo's. But, as is the case with ESPN, the NFL is just too late to the game.

Why Fans and Marketers Love Fantasy Sports

Consumer Engagement is the key to understanding the value of Fantasy Sports - for everyone involved. In a blog post about ESPN, a former ad-bro of mine called the network: a hyped-up, overwritten, Emmy-winning gossip show for men" about "the oldest, most original reality show there is: Professional sports." And here's the thing - he's completely spot on. As ESPN and the NFL Network continue to process professional sports into digestible, pre-packaged narratives, fans across the country get more and more involved into story-lines that never used to matter. In an excerpt from Eating the Dinosaur, Chuck Klosterman says:

In essence, the NFL Network works exactly like FOX News: It stays on message and invents talking points for its core constituency to absorb. If Donovan McNabb is temporarily benched for Kevin Kolb during week ten of the season, that decision is turned into a collection of questions for football people to ponder until Sunday. How will McNabb react? Is his career at a crossroads? Has Eagles coach Andy Reid lost control of his offense? How will this impact your fantasy team? These are the ideas football fans are supposed to talk about during the run-up to week eleven, and the NFL Network ensures that those debates will be part of the public discourse.

(It's also worth pointing out that J.Dubs' ESPN insights came along before Klosterman's).

But this is exactly the point. Avid sports fans gobble up this male-equivalent of TMZ Gossip because outlets like ESPN and the NFL Network have made it part of our discourse. And with the rise of fantasy sports, these narratives seem to have become more essential. In the good old days, we only had to care about our Home Team. But thanks to fantasy sports, fan engagement has blown through the roof. Now, I not only have to keep tabs on the Red Sox, but also the dozen+ players on my Fantasy Team spread throughout countless MLB divisions.

Red Sox games used to be the only ones that mattered. But all of a sudden, I find myself watching games because I want to see if my closer Joe Nathan (Twins) gets the save or Nyjer Morgan (Nationals) gets another stolen base. These are NL players that never mattered to me - but that was before I drafted them. Their success is the key to mine. Thanks to fantasy sports, the MLB suddenly has fans from around the country viewing more games.I mean, if it weren't for all those managers with Nyjer Morgan on their squads, who else would be watching a brutal Nat's games? Surely not the folks on The Hill.

Fantasy Sports adds a whole new level of engagement to professional sports - and marketers are finally beginning to understand that. ESPN lists fantasy stats on TV. Rotowire syndicates their fantasy data online. The NFL pushes its viewers to NFL.com for research. If people are eating this crap up, they might as well make money off it. And as marketers get a little more creative on how to monetize digital content, we'll see even more resources chasing that potential revenue - and why not? Everybody wins.

~ Marketers generate sponsorship and ad revenue.

~ The MLB finally becomes more essential to its fans.

~ Sports bros have more gossip to obsess over.

Seriously, everybody wins.

And while I use baseball as an example, this exact same phenomenon takes place during football and basketball seasons as well. Personally, I'm even more obsessed during the NFL season. Ask me how badly I hate Jay Cutler right now. I dare you: http://www.youtube.com/watch?v=LXLq1Vy4llw

What do you think about the growth of fantasy sports? The leagues - the Resources - the Gossip and conversation surrounding it? Are fantasy sports only beginning to hit their stride?

What about the battle for market share? do you think any site can overtake Yahoo! Sports?